Articles by Walter Carter
To mandolin aficionados, the sight of the earliest known Gibson F-5 mandolin should have been a gratifying – if not inspiring – experience. After all, it is the first example of a mandolin design that, in the hands of such players as Bill Monroe, Dave Apollon, David Grisman, Sam Bush and Chris Thile (the list is endless), would become acclaimed as the pinnacle of American mandolin design. Instead, this earliest F-5 was a horrifying sight – the most important mandolin in American history, disfigured with ugly top cracks, amateurishly patched together with wood putty.
That has been the image of F-5 #70281 that the mandolin world has had to live with since 1977, when Darryl Wolfe documented it in his F-5 Journal. As Wolfe noted, it was signed by its designer, acoustic engineer Lloyd Loar, on June 1, 1922, preceding all other known Loar F-5s by five months. In 2015, however, a new owner acquired 70281 and brought it to Stephen Gilchrist, the renowned Australian mandolin maker, with a request to bring it back to life.
Gilchrist took possession of 70281 in November 2015, on his annual trip to Nashville to deliver his latest batch of new instruments to us at Carter Vintage Guitars, his U.S. distributor. Seeing 70281 in person was an emotional experience for him. “I was excited and I must say honored at the fact that it was brought to me for restoration,” Gilchrist said. “I had only seen photos of it that Darryl Wolf took. It was true to the photos.
“It was a very personal thing to me because that is where my whole career – and many of us who build these instruments, love these instruments, play them – that’s where our whole career started from.”
Moreover, the confidence Gilchrist had in his own abilities, the confidence that he would have to bring to repairing the instrument, originated in that same instrument. In that sense, 70281 was bringing him full circle. “That instrument got me to where I was able to fix that instrument,” he explained. “That’s what flashed over me… I got here because of you.”
Gilchrist took 70281 home to Lake Gnotuk in southeastern Australia. “I had a year to do the repair,” he said, “and I spent the first three months thinking about it.” During that time, he got to know not only the extent of the damage but also the specifications of the instrument. Its measurements were consistent with later Loar-signed F-5s and with the spec sheet that had survived in Gibson’s engineering archives. The only structural differences were the size of the f-holes, which were slimmer, and the braces, which were tapered in a different way. Cosmetic differences were minor and included an odd, over-engineered pickguard bracket and a volute spline on the heel button.
Structurally, the damage was not as bad as it first appeared. “Looking through the tail pin hole,” Gilchrist said, “you could see it was initially a really clean break. There were some fine splinters hanging down on the inside of the instrument and you could see where the damage lines were. You could see where the bass side was pushed down from the trauma and never leveled off. The wood putty was just there to smooth off the terrace from the earthquake that had happened on top. You could push it and would creak and move and you could see light.
“I was thinking that if only I could realign those areas and push the plate back upwards, it would go back together cleanly. It wasn’t as straightforward as that, because on the top surface there was quite a bit of wood missing. In trying to get the top level again, they put some crude finish on it that damaged the wood underneath.”
Gilchrist came up with a game plan and presented the owner with three options. Here is his original email to the owner:
Simply re-align and glue all the cracks, fill all the missing pieces (wood fibre and glue) and as best as can be done to match it to the treble side by disguising the damaged area with stain and varnish. This would be the least invasive option but worst visually. Structurally not ideal but stable.
Splice in a new matching piece of red spruce 1 5/8″ wide the length of the soundboard to replace all the worst damage. A better visual and structural option but more invasive and would mean there would be two extra glue seams in the top (i.e., four-piece top instead of two pieces – a visual consideration) and it still leaves the previously poorly spliced outer wing of the bass F hole to be dealt with once the main damage is replaced.
Replace the whole bass side of the soundboard back to the center seam (two-piece top, like the original). This would be the most invasive but structurally and visually the best result, not considering the loss of originality of half the top.
In addition, Gilchrist saw that the original set of the neck caused the bridge to be lowered to the point of “bottoming out,” so a neckset would be needed, along with some fret work and other neck repairs, but that was a separate project.
As Gilchrist noted, Option 1 would be the least invasive, and that’s the path they chose for the restoration.
“The first thing I did,” Gilchrist recalled, “I made a mold to encase the instrument just below the lip of the top so the rim would maintain its proper shape. They always spring open. Then I made a plaster cast of the top. Because the deformed part of the top was sinking in, that formed a positive rise in the cast that could be shaved down to the proper profile lines. So then I had the perfect negative outside form to press the top into.”
To facilitate the top removal, he took off the fingerboard and the fingerboard extension support and then used steam and warm spatulas to work the top off the body. “Once the top came off, I picked out all the wood putty,” he said. “It had to come out before the pressing into the mold. Once the wood putty was out, the full extent of the damage was revealed, and it was shocking. The violent trauma was really apparent. You can see all of the cracks and what appears to be a blade mark as well. The first thing that came to my mind was Psycho.
“Once I got the wood putty off I was able to do a dry press initially,” he continued, “just forcing it into the plaster mold, getting every little shard, every little misaligned part pushing hard against the plaster. The whole thing came together quite well, so it just needed to be animal glued up to hold that form. There’s nothing spliced in there at all. The plaster mold was the key to all that, reforming the top and pushing back up into the top as much of the splintering and shards as possible.”
“Before I did that, I thought the bass tone bar would have to be replaced because it was completely cut in half by the blade, or whatever it was. But it wasn’t really severed. It cracked under the deformation. All the fibers were there. Just saturating them with super fine super glue locked everything back into place. That was another plus for it.”
Gilchrist installed a long cleat, 1/16” thick, on the underside of the top to support the repaired cracks. He had had to remove a small amount of wood to fix the cracks, and the mass of the cleat was approximately equal to the amount of wood removed.
At that point, the question, as with any major repair, was how the repair would affect the sound of the instrument. Gilchrist had the answer before the top was back on 70281. “The cracks were all glued back together against the plaster mold,” he said, “and as soon as I did that, the sound came back. Just by tapping it you could hear that fine ring, that bell. With any crack there’s a certain dullness of energy, even if you can’t hear the rattle. This thing rings again, sustains and gives a real focused tap. Once I heard that, I knew everything was going to be all right. The rest was just going to be cosmetics.”
Gilchrist chose to fill the cracks with a mixture of wood dust and glue rather than inserting splices. “To splice tiny bits in you’d have to remove tiny bits of wood,” he explained, “and because of light refraction they would have stood out anyway. You would have had to remove top wood to do that, so I filled it with original wood dust, the nasty scars, that I knew wouldn’t react to light. In one direction the scars are dark, the other light. There’s a neutral position where you can almost fool yourself into thinking it’s not there at all.”
With the cracks filled, Gilchrist began working on the finish – only on the area of the damage. “Everything else, though it was incredibly worn, was left original,” he said. “I had a written law I wrote for myself that I was not to go beyond the center seam when removing the original finish. I had to remove a little bit to get a clear bit of raw spruce to do the water stain. The very first thing, I shot potassium dichromate. It’s a photo-reactive chemical. If you put it on natural cellulose material, such as wood, and expose it to ultraviolet light it will darken. It’s a good way to age the wood. It’s the same process that happens naturally.
“At that point, with the raw wood, you’ve got to allow for the color of the wood and water-staining and the color of the varnish on top. You have to make sure the initial dichromate was not too dark. Fortunately, I had the original treble side right beside it to compare it to. Then I did the water stain sunburst like I normally do, directly into the wood. Once I did that, I was getting pretty confident. I had the background color of the wood right. I really enjoyed the process. It was fun blending that in. Then, like the original finish would have had, I put a really dark shellac sealant coat over it. That gives it that dark amber glow that Loars have.
“The more of the shellac sealer coat I put on, the more the scars started to soften. Any touchup color, I wanted to have that buried down. I was thinking about layers, and when you’re doing touchup you want that as low as possible. I did the touchup on the raw wood, then the potassium and then the water stain, then the dark shellac sealer, and then the clear spirit varnish top coats.”
Halfway through the finishing, Gilchrist reinstalled the neck, added a dummy fingerboard, strung up the mandolin and played it. “I did a little sound file on the phone and sent it to the owner,” he recalled, “and he got all excited. It was clear that the sound had come back.”
The fingerboard of 70281 was a separate restoration project. “A lot of the frets were in the wrong position, as on many Loars,” Gilchrist said. “I had to plug and re-tap a number of frets. On the instrument as it was, only the frets from 29 back to 17 were original. There was fret wear and original pick wear in that area, and I left that. The first 17 were wide guitar wire. I replaced them. I also had to replace the binding on the bass side. It was falling off and cracked and broken in a lot of places.”
After a few additional repairs – replacing the binding on one body point, closing a center seam separation on the back – Gilchrist reinstalled the fingerboard and strung up the fully restored mandolin. He had spent 100-plus hours, spread over a four-month period, to get to this point. Appropriately, the first thing he played on the fully restored 70281 was a Bill Monroe tune called “The Lloyd Loar.”
Before the repairs, 70281 had a distinctive sound due to the slimmer f-holes, which affect the fundamental frequency of the air chamber – one of the elements that can be “tuned,” as stated on the label that Lloyd Loar signed. The fundamental frequency of 70281’s air chamber was a half-tone lower than the typical Loar F-5. Most are between D and D#, but 70281 is between C# and D. “Generally, the lower the frequency, the more bottom end is going to be under the foundation of the sound,” Gilchrist explained. “There’s going to be a thicker tone to the bell.”
The mandolin had always had an impressive sound. Darryl Wolfe has recently posted online that it was “the best-sounding Loar I have ever played… more like Monroe’s Loar than Monroe’s Loar, if that makes any sense.” Given the low frequency of the air chamber, it should have had a strong bass sound, but before the repair, mandolinist Chris Thile played it and commented that the bass response was “spongy” – an issue that has now been corrected. As Gilchrist explained, “The treble tone of this mandolin was always amazing, but the clarity of the bottom end was really compromised by the lack of stiffness on that side. It was hard to tell what was happening with the bass response until the top was glued back together. That was the real great sense of achievement, to bring back the sound of the instrument.”
In November 2016, the owner of 70281 held it and played it for the first time in a year. He would prefer that his identity not be publicized, but he plans for the instrument to be played.
Did you know Carter Vintage Guitars is also a Gibson Custom Shop and Gibson Memphis dealer? We do not list our inventory on the website so feel free to call or email us and we'll help find the perfect Gibson for you.
Step one: Be careful what you dream
This is the easy part of starting any business. Someone says “Why haven’t you gone out on your own?” And we don’t really have a good answer, other than it’s nice to have a steady paycheck. After more people ask, we start thinking maybe we should. After all, we know the business. My wife, Christie, has worked for one of the best-known vintage guitar stores for almost 25 years. I worked at the same store in two different stints totaling 12 years, and during the interim I was Gibson’s in-house historian. We know how to buy and sell vintage guitars, we know what not to do, we know a lot of people in the guitar business, and as most longtime managers come to believe, we can do a better job running a business than our boss. Yeah, we should open our own business.
At this point, we’re in a blissful state that might be described as “vacation dreamland.” Every time we vacation in a cool place, we start looking at housing costs and trying to figure out how we could move there. On a July Fourth weekend trip to Asheville, NC, our focus begins to shift from homes to business properties. As we sample craft beers, talk to local artists, eat some great food and enjoy the block-party atmosphere of downtown Asheville, we talk about moving there and opening a guitar store.
The morning of the Fourth, we head home to Nashville. We’re barely out of Asheville when we see signs for the little town of Waynesville, where we have some guitar friends. So we decide to see if they are around.
We park in a free public lot a block from Main St. That’s right, a free public parking lot. I can’t remember ever seeing one. On Main St., happy people of all ages fill the sidewalks. All the shops and restaurants are open and welcoming. The town band is playing a Sousa march on the courthouse steps. We have time-traveled back to Mayberry USA.
On a side street by the courthouse, a quaint three-story building has a “For Sale” sign. On Main St. we find an open real estate office, where we step over a blond Labrador lying in the doorway and ask about the building. The agent gets us a walk-through, but the layout turns out to be unworkable. The agent then tells us about a building for sale on Main St., right in the middle of the main block of downtown Waynesville.
On the street level, the building houses an antiques/gift shop. The basement has a back door that’s at ground level with a lower street running parallel to Main—ideal for a delivery entrance or an entrance for a second business. The lower level is equipped with woodworking machinery (we’re thinking guitar repair shop). On the floor above the shop, two apartments could provide rental income or perhaps living space for the shop owners.
In other words, it’s perfect.
So why didn’t we jump on it? Well, first of all, we’ve lived in Nashville all of our adult lives, along with around a million other people. Waynesville is in the mountains, and less than 10,000 people live there. Asheville, a half-hour away, is the “big city” with less than 100,000. Lots of people go there to beat the summer heat or to ski in the wintertime. But would a walk-in clientele of vacationing families and skiers really support a retail guitar business? Would we have to hawk dulcimers—the guitar equivalent of an Appalachian folk art souvenir—to make ends meet? Would we be completely dependent on the internet for guitar sales? In which case, why have a store at all?
Second, although Christie handled all the banking and insurance business for our employer, we had never put pencil to paper from our personal financial perspective to figure how much mortgage and insurance on a $500k building would be. Although we knew the profit margins we could expect on vintage sales, we’d never translated that into how many guitars or what type of guitars we would have to sell each month to make our own business work? And more important, we hadn’t considered how much we would need for startup costs and cash reserves.
So for those and other considerations (such as, it would take six months to get our home in shape to sell), we don’t jump.
Step 2: Home or shop?
As job frustration begins to outweigh the security of a steady paycheck, we begin to think more seriously about starting our own business, and we keep our eyes open for a good shop location in Nashville.
We walk through a few rental spaces. One is a small building at the edge of the Gulch, a new and trendy area near downtown Nashville. But the space is on two floors with an awkward layout, and the natural entrance from the parking lot in the back is to the lower floor, which has no showroom space. Rent is affordable at $2500 a month, but purchase is not an option because the area is developing fast, and the owner will expect a premium price.
We check out a larger storefront a few miles west of downtown. It’s in a high-traffic area and surrounded by low-end antique stores. But it’s a dump. An HVAC unit sits in the middle of the showroom like a medieval monster, with ductwork extending a few feet in every direction. A large storage area could double as a dungeon. Rent is $4000. Buildout is not even worth considering.
A few blocks down the street, a former bank building houses a failing interior design company. The space is nice, with a lower floor for offices and storage, and possibly enough space for a full-fledged repair shop. Buildout cost would be next to nothing. We could open tomorrow. The asking price of $750,000 seems like a huge chunk of debt to take on at the beginning of a business. The neighboring businesses are a women’s shelter/enterprise, a drug store advertising “Everything Diabetic,” and a Krystal across the street.
A building we had considered buying as an investment now begins to look more attractive. It’s 8000 square feet—huge for a guitar store—most of which is warehouse space. The price is in the same range as the former bank building. This building is run-down, but the location is super, on the not-yet-very-developed edge of the Gulch business district, on a major thoroughfare three blocks south of Nashville’s new convention center. Property prices are going up in this area because “The hotel’s coming through,” or so the property owners all believe.
The neighboring businesses are cool. The property shares a parking lot with Arnold’s, Nashville’s most popular meat-and-three restaurant. On the other side is the hip new Jackalope brewery. Across the street is a long-established antique store. Around the corner is Jack White’s new Third Man Records. Three more restaurants are a block away, along with another micro-brewery, a trendy jewelry store, Nashville’s largest liquor store and an under-construction Marriott hotel. For $10,000 we can put the building under contract for a 90-day “due diligence” period, during which we can back out for any reason and get our deposit back. So we do it.
In the meantime, we’re wondering if maybe we should just work out of our house, i.e., an internet-only business. We still haven’t put any financial figures together, but whatever the overhead of a bricks-and-mortar store is, we know we’ll have to multiply that by a factor of 4 or 5 to cover it. (That’s figuring an optimistic profit margin of 20-25 percent on instruments.) If the monthly rent is $5000, that’s $60k for the year. We’ll have to generate $300k in sales just to cover the rent, before we can pay ourselves (or any other employees). If we didn’t have a store, we’d have $60k in profits, which would go a long way toward covering our personal expenses.
The home-based business looks attractive except for the obvious drawback: It would be in our home. That might be okay if we were strictly internet/phone-based, if all we needed was space to store inventory and pack shipping boxes. But people need to touch instruments. Some buyers may want to fly in to try out instruments. So our home guitar business would need some area hospitable to visitors. We could do that. We have a lower level, a “daylight basement,” accessible from our driveway.
Let’s fast-forward a few months and settle this dilemma. We’re working out of the house while our building is being renovated. We’re selling enough guitars to make us wonder if we should rent or flip the building and keep the business at home. But the downstairs den that was going to be our showroom is crammed with guitar cases, shipping boxes and photography equipment. On the main floor, our living room, den and hallway are crammed with guitars. The phone rings on a Sunday morning at 7:30 a.m. I’m thinking it’s the producers of the TV show “Hoarders,” because our daughter has been threatening to call them. Instead it’s a guy we’ve bought a few guitars from. “Are you up?” he asks. I’m on my first cup of coffee and not dressed, but I answer “Sure, come on by.” He says, “I’m in your driveway.”
Yes, we want a business with a comfortable, homey feeling, but instead of bringing the business into our living room we decide to bring our living room to the business.
Step 3. What’s a business plan?
We can’t start small. We can’t just rent a 1000-square-foot hole in the wall and have a quaint little mom-and-pop shop. We still have a home mortgage, a kid starting college, and plenty of expenses to cover. Since we’ll be competing with our current employer, we can’t just put one foot in the water and have one of us quit and one of us keep the steady income. It will be all or nothing.
“All,” at this point, is our collection of instruments. That will cover the cost of starting inventory to some extent (we’ll need to acquire more instruments, and we’ll need to stock accessories), but we’re going to need loans to buy a building, to renovate the building, to pay for startup costs (phones, computers, furniture) and to provide a cash reserve to cover operating costs while the business gets off the ground. As we begin talking informally to potential partners, private lenders and bankers, all roads eventually lead to the same place: the business plan.
Our business plan is simple:
- Buy smart
- Treat people right
If that’s not enough, we can add a third point:
- If [fill in the name of virtually any guitar dealer] can be successful, surely we can, too.
Plus, we’ll have guitar-related photography and artwork, high-end lessons, live music and—most important—a friendly, comfortable atmosphere to set us apart from our competitors.
Somehow that’s not enough. A real business plan apparently has to have hard numbers. A friend with a lot of financial experience points us to a website where we download a sample business plan for a music store. I adjust all the prose—unique services we’ll provide, assessment of the competition, advantages of selling vintage vs. new guitars—to fit our business. In the section for expenses, I come up with reasonable estimates for startup costs and operating costs. But then comes a section called Projections. How much business are we going to do each month? Who can predict that?
After some time spent trying to visualize exactly how many people will walk through our doors on a Monday, and how many more the next Monday, how much each of them will spend, how many guitars we will sell each month, how many staff members we’ll need from one month to the next, I realize it’s futile. This is not a McDonald’s, where they have thousands of similar stores and, no doubt, a proven formula where they plug in traffic data, local demographics, proximity to an interstate exit, etc., and out comes a sales projection they can take to the bank. There’s nothing like that for a guitar store—especially a vintage store.
It can’t be this hard (see point #3 of our business plan). People open businesses all the time. Except for the assumption that a blind pig will eventually find an acorn, how can anyone assume sales will start at a certain level and will increase at a certain rate? Then it hits me. They don’t. The projection, like the prose in the business plan, is designed to make an investor or lender feel confident. What you really do is, you figure out how much you need, and then work backwards, filling in whatever numbers are required to get you there. I check with our financial friend, who confirms my suspicion. Now I feel like we’re seeing the forest and not just the trees.
I rig up an Excel spreadsheet and start plugging in numbers. What do we think sales will be in three years? How about $2 million? Okay, if we pay ourselves comfortably and hire a full staff and trick out the building… Better make that $4 million. That means we do $1 million the first year, then $2 million the second year, then we double our sales again. Maybe we should be more conservative. What happens if we slash a few expenses?
Eventually, we narrow the figures down to a range of reasonable expectations. Let’s hope our banker or accountant doesn’t ask too many detailed questions that start with “How do you know…” The true answers are “gut feeling” or “see point #3.”
My knowledge of formal accounting procedures is limited. I once attended an employer-sponsored seminar where two professors from Vanderbilt’s business school tried to explain basic accounting and how to decipher a balance sheet. I still don’t understand the details but I did grasp the concept that an accountant’s job is to massage the numbers to put the company in the best light—whether it’s minimizing taxes (if they’re dealing with the IRS), maximizing profit (if they’re dealing with stockholders) or making the company look attractive to a banker. So we take our one-page spreadsheet to an accountant. A few weeks later, we have a huge stack of paper full of numbers and accounting language. It reminds me of W.C. Field’s famous advice: If you can’t dazzle them with brilliance, baffle them with bullshit.
Step 4. Name the baby
Early in the process of writing a business plan, an event occurs that changes our timetable (not to mention our lives): We come to an abrupt parting of the ways with our employer. With no income, and assets consisting primarily of guitars, we are in the vintage guitar business whether we want to be or not.
Suddenly, as they say in legal contracts, time is of the essence. And every small detail seems to require an enormous amount of time. Our first deadline is the vintage show in Arlington, TX, just a few weeks off. We need to be there, to let the vintage guitar world know we’re in business. We’ll be looking for guitars to buy, but more importantly, we’ll be handing out business cards.
To have a business card, of course, we need a name for our business, which we haven’t thought about yet. Should the business have our name in it, which personalizes it but could make it more difficult to sell if that time should ever come (since there would no longer be any Carters involved with Carters’ Guitars)? We consider everything from Nashville Guitar Exchange to Carter & Carter to Christie & Walter’s Cool and Comfortable Little Guitar Shop. We run the names by our friends, and in every case, somebody likes it and somebody hates it. We pick three names, and I spend the better part of a day at the Secretary of State’s office registering them.
Two days before Arlington, I get on the Staples website and pick one of their generic card designs and plug in “Carters’ Guitars.” We go online and reserve a URL (several, actually) and head off to Arlington. And we hit the first speed bump in our road to a successful startup. The color scheme of the business card—brown background with gold type—makes it hard to read for many of the aging eyes in the vintage world. Furthermore, “Carters’ Guitars” may look mellifluous, with “Car” rhyming with “tar,” but when you say it, it doesn’t roll of the tongue. Instead, it gets stuck in the back of your mouth. And, as we all know, everyone has trouble with apostrophes; in correspondence, the plural Carters’ becomes the singular Carter’s.
For our next outing, to the Woodstock (NY) luthiers show, where we hope to convince some independent builders to send us guitars, we print up a new batch of cards with Carter & Carter in small caps—a formal presentation that looks like a law firm. And that’s the reaction we get. It looks cold and formal, like a law firm.
The naming problem is compounded—and soon solved—by Christie, who keeps referring to us by neither name. Instead, she says Carter Vintage. So that’s what we settle on. We’re able to secure cartervintage.com for our website. It takes a full day in the city and state offices to register the name and fill out all the forms so we can be properly taxed.
We have a name. Now we need a logo. An artistic friend volunteers to help, and she comes up with a few designs. Then a few more. Before we know it, we have logos in styles that connect to every era from the ’20s to the ’70s. We avoid using a 1920s-style Art Deco typeface or an artsy-craftsy antique look, and we settle for a style from the 1950s—an era of hot cars (one version of our logo typeface is called Cadillac), hot music and cool electric guitars. We add the half-body of an f-hole guitar to represent traditional acoustics and electrics. After a dozen or so revisions, we upload it to our home page, along with our cell phone numbers.
We’re in business. The name, the logo, the website and all the legal stuff has taken several months. As we soon find out, that was the easy part.
Step 5: Find some money
The deadline for our due diligence period on our building comes about two weeks after we part ways with our steady paychecks. We can still withdraw our offer, get our $10k earnest money back, and then… then what? The building is a good real estate investment, regardless of whether we put a guitar store in it, so that decision is an easy one.
Jobless, and with a portfolio consisting only of old guitars, we might have had a problem getting a $700k loan, but the sellers are offering to finance it. And why not? The property has been family owned for 40 years. They have made no improvements, so it has most likely been paid off for years. If they invest the cash in CDs, they’ll make less than 1 percent in interest. If we default on the loan, they get the building back in better condition than when they sold it, and they can sell it again. One month into our unemployment, we close on the building.
Now we’re committed. Our advice to anyone who reaches this point is simple: Don’t make any plans to do anything else for at least a year.
We haven’t been so diligent in our due diligence. On an early walk-through, our real-estate friend estimates the building can be renovated for $75-100k. We hire an architect to do an “as-built” drawing. We pencil-in some walls and meet briefly with a few commercial contractors. One contractor estimates a cost of around $225k. We fill in a few more details, and he comes back at $300k.
In the meantime, we get estimates for floor treatment, framing, drywall, insulation, bathrooms, roof repairs, even for a new HVAC system—all without a formal plan. We can contract this ourselves, we think, and save $100k. And that is how we are introduced to the world of codes, permits and licenses for residential contractors, limited commercial contractors and general contractors. No, we can not contract it ourselves; the building permit limit for an individual property owner is $25k. We have to have a general contractor. The commercial GC license is more rigorous and more expensive to maintain. It should have come as no surprise that none of our second round of contractor candidates actually has a commercial GC license.
Anyone who has been through a major construction project knows all the things that will—not can, will—go wrong. Anyone who has not been through a major construction project could never imagine how frustrating and harrowing the experience is. Suffice it to say that even if you have a general contractor, you need to be there every day watching over the job. Unfortunately for us, we also need to generate some income, so we have to spend the better part of our days focusing on the vintage guitar business rather than on the building renovation.
The combination of being jobless and being overwhelmed by the building renovation, not to mention the uncertainty of a new business venture, is a recipe for depression. Christie and I seldom discuss it, but we realize that we both can’t sink into depression at the same time. I force myself to be positive when she seems ready to give up, and she does the same. We keep going back to point #3 of our business plan. Lots of other people have made it through this. Surely, we can, too.
Obviously, at this point we need money for the building renovation and for business startup costs and operating capital. It’s probably not going to come from the banker who holds our home mortgage. And it may not come from a banker at all. A piece of property looks secure to loan officer. Building out that property for a specific business use is less secure, if only because the lender for the buildout will be second in the line of creditors. Operating capital for a new business venture carries an even higher risk, since the only collateral is used equipment and unsold inventory. So it’s good to know some people with money to spare.
At the time of our financial need, the economy is barely recovering from the nose-dive of 2008. The people who sold us the property were happy to finance it at a reasonable rate because there was no safe investment option that would yield that much. We get the buildout loan under a similar scenario. A friend—important point: a friend with an instrument collection and, consequently, some familiarity with the vintage guitar market—has a trust fund that’s making him $0. He instructs his fund to lend us the buildout money. Simple as that. Except for a few delays that threaten to halt construction.
We also go to a banker—not just any banker but one with whom Christie has developed a relationship during our previous employment. He has seen how a line of credit for a vintage guitar business could fluctuate wildly as high-dollar guitars are bought and sold. And he has confidence in Christie’s ability to buy wisely and sell profitably. With the help of our professionally prepared business plan, our banker offers us a line of credit for inventory purchases, with the inventory itself as collateral.
Step 6: Find some guitars
Our starting inventory is our personal collection of instruments. However, from the moment that a bottom line appears on our business plan, it’s obvious that our collection will not support us for very long. We would need to turn it twice in the first year to make ends meet.
We also notice that our collection has areas of focus, which is nice for a collection but leaves large holes when we’re trying to stock a vintage store. We’re heavy on Martins and lap steels, but we have only a handful of Fenders and Gibsons. We don’t want to be pigeonholed as a strictly acoustic dealer. We need some electric guitars.
We go to several guitar shows, where our fellow dealers welcome us with offers to help us build inventory. Their instruments are priced typically a little above retail, so after their dealer-to-dealer discount, we would be buying at 95-100 percent of retail.
We’re able to buy a few guitars and sell a few at the shows, but we quickly see we can’t build a business around guitar shows. We haven’t had much experience with eBay or craigslist—just enough to know that the overwhelming majority of items have undisclosed issues, are priced at retail or higher, and will require an inordinate amount of time to seal the deal. The pawnshops all apparently have a copy of a price guide, so the few U.S.-made guitars that they might have are all at retail or higher. And several Nashville home-based dealers have spent a decade or more developing relationships with the pawns, so there’s no future there for us.
So where do we find inventory? Well, inventory just starts finding us. Dissatisfied customers from other dealers call with instruments to sell or consign. The Martins on our website generate a post on the unofficial Martin forum. The same thing happens with mandolins on the mandolincafe.com forum. Locally, a dealer who specializes in electrics takes in a few acoustics in trade and comes to us to unload them. Some of our new clients are old friends, but others are people who didn’t know us at all, who contact us on the recommendation of a friend. There’s a lot of “I’ve heard good things about you.” Even though our business is brand new, we’re fortunate to have good reputations already in place.
Step by step, the place begins to look like a store. At 11:00 one night, we finish off a bottle of wine in celebration as the installers turn on our new street sign and our logo lights up. Our friend Lamar Sorrento, the Memphis artist whose paintings hang in B.B. King’s nightclubs, drives to Nashville one afternoon and spends the night in the store, working on a mural of country music figures and the Ryman Auditorium. The next morning, we find not only the finished Ryman but a bonus painting as well—Sorrento’s famous rendition of the death of Robert Johnson.
Not everything goes according to plan. We had intended to offer a limited selection of new instruments from major makers—only those that would appeal to vintage customers. For electrics, we want the Les Paul reissues from Gibson’s Custom Shop, and Gibson comes through with a dealership and additional support for the murals we’re planning for our outside walls. For acoustics, we had been talking with Martin from the moment we were on our own, but when the time comes to place our opening order, they tell us the Nashville market is changing and they’re holding off on our dealership. We’re more than disappointed, but rather than burn that bridge, we remind ourselves that one of the selling points for vintage guitars is that they’re better than new guitars, and we’ll make a special effort to tell customers that when it comes to this brand. And we tell our mural artists to replace the Martin headstock with a Gibson.
Construction deadlines come and go. At one point we get red-tagged by a codes inspector, shutting us down for two weeks while we wait for a mechanical engineer to change the ductwork spec on his plans to match the codes-compliant ductwork that has already been installed. We fail another inspection because our low-voltage wiring installer neglected to get a permit. We can’t set a grand opening date because we have no confidence now in our ability to pass final inspection.
Eventually we get to a point where if we cut down the height of our kitchen counter by 3” to meet a new handicap code, we can get our certificate of occupancy. It means we have to return our newly purchased dishwasher and try to find a 33” model (there is no such thing), so we have a gaping hole in the cabinet. We have one computer, no business phones (we’re using our cell phones), no display cases, no strings and accessories, and one employee. But hey, we have some instruments and a sign, and people are stopping in anyway. Might as well open the doors.
There’s one upside to all of this. One morning, I notice that I can pull my belt a notch tighter than I’ve been able to in years. I step on the scales, and I’ve lost 20 pounds. I wouldn’t recommend the Stress Diet—a visit to a walk-in clinic for a cold that I couldn’t shake found my blood pressure up by 20 points—but I think I look better. No one else seems to notice, though. If anyone does comment, they just say I look tired.
Step 7: We built it. Will they come?
Our first few weeks as store owners make us second-guess our decision to have a store. We’re doing business over the phone, thanks to our website and Facebook, and we’re busy getting the buildout really finished. The handrail for the ramp from our front room to our showroom won’t stay anchored. One of our new AC units won’t come on. The stationary handles on our front door will move in a way that can trap us in the building.
There are long periods—sometimes two or three hours—when no one comes into the store, causing us to look at each other and go “What have we done?” After one such period on a Saturday, I drive to a nearby Dollar General and buy some party balloons to attach to our street sign. A few people come into the store. I don’t know if the balloons drew them in, but they make me feel better.
The showroom was supposed to be spacious in a comfortable way, but it looks cavernous. The instruments that jammed our house barely fill one wall. We space the slat-wall hooks three or four feet apart to make the walls look full.
We’re still virtually unfurnished. We have padded benches in our showroom and chairs in our tryout rooms for customer comfort, but that’s about it. Through a friend, we find out about a music store that is going out of business and selling their custom-made display cases and bookshelves. It’s a good deal, except that it’s in Minneapolis. Christie and her brother, a professional truck driver, fly up, hire some muscle from a local moving company, disassemble all the furniture, fill up a 26-foot truck and drive it to Nashville.
We order some strings, T-shirts, books, straps, picks and other accessories. It doesn’t half-fill our shelves and displays, but before we know it we’ve got $5000 tied up in non-instrument items. We’re the closest music store to downtown Nashville, and the street musicians start coming to us when they break a string. “I need a B-string. Actually, I’ll take two.” With the sale of any guitar, we recoup our entire expense with one sales transaction. With accessories, it looks like we’re going to have to do it one string at a time.
Word gets around that there’s an alternative to the vintage dealer who’s been established in Nashville for 40 years. There’s a place where customers are offered something to drink and invited to take an instrument off the wall and try it out. Still, it takes the better part of a month before we have a day when there’s at least one walk-in customer in the store at any given time. We think we’re over the hump, but it takes another month or so before we can really call our walk-in traffic steady.
Even as the walls become covered with instruments, inventory is still our main concern. A lot of instrument owners want to consign rather than sell outright, but we buy whenever we can. And our line of credit starts looking less and less adequate. We remember what our financial advisor/friend told us: Most new business ventures fail because they’re under-capitalized. He recommended we have something in the neighborhood of $1.5 million in cash reserves to get us through the first year. Oops, we forgot about that. Actually, we rationalized that many new businesses fail because they start out with too much debt. And we further rationalize that most new businesses fail anyway, for whatever reason, whether they’re adequately capitalized or not. We were able to get going without bringing in partners to pledge cash reserves and without borrowing more money for operating costs. We’ve got inventory; now we need sales. Or is it the other way around?
At one point we have three prewar Martin D-18s. After we go forever (actually, only a few days) without selling anything significant, I tell Christie one morning, with a combination of determination and panic, “We have got to sell an instrument today.” She sells one of the Martins that day, and within a few days the other two are gone. Suddenly, our inventory looks very thin, and I tell Christie, with the same degree of determination and panic, “We have got to buy some instruments today.”
Carter Vintage Guitars has been open four months now. Cash flow is pretty good, in part because we’ve spread the startup costs over several months. Of course, that means we’re still in need of some of the startup items. We’re still working with an Excel spreadsheet as our inventory database, which is becoming increasingly cumbersome. We’re still doing all our own website work, and it has grown to the point where it cries for something more sophisticated than my HTML-for-dummies coding ability.
We decided to be open on Sunday afternoons, so we haven’t had a day off, except for national holidays. I seldom sleep past 6 am. Christie sleeps later only because she’s been up past midnight working on our Facebook page. We have yet to leave the store within an hour after closing time. I still have scrap lumber and power tools in my office.
In the meantime, we’re encouraged by all the people who not only want us to be successful but are willing to do something about it. A friend volunteers to shoot some videos and set up a YouTube channel. More friends, who are truly great musicians, volunteer to demo the instruments.
Another friend installs herself as bookkeeper, and after several weeks of reconciling our hand-written receipts and check stubs, she comes to us with a piece of paper in hand and a confused/concerned look on her face. “This is unheard of,” she says. We brace for some bad news. Instead, she hands us a financial report and declares Carter Vintage to be a profitable business.
It’s October 2013, one year since we went on our own. I guess it wasn’t so hard after all.
Update: June 1, 2020.
A lot has changed in the seven years since we officially opened on June 1, 2013. We no longer offer lessons. We no longer host live performances. We no longer devote any significant wall space to artwork. The reason we’ve let those elements of our business fall by the wayside is that we have been successful far beyond our initial expectations. The business of buying and selling guitars dominated our space as well as our time. We’ve become a destination for tourists, which ironically inspired us to close on Sundays. We needed a break.
Our worries now are of a different sort. We’ve run out of space in our building. We walled off our kitchen area so we could display more instruments. We have plans to bump out the back of the building. Our location, which has been a boon to business and a great real estate investment, is also responsible for a property tax bill that has tripled and may soon go up again by as much as 32 percent. The growth in our area has eaten up parking areas so we have a sizeable monthly bill for employee parking. And we’re in the middle of the Covid-19 pandemic, which has forced us to close the doors and has cut our sales back to 2013 levels. The stress level is less than it was seven years ago, but the future is every bit as uncertain.